Old Age and Survivor's Insurance

Rescinded 1981

SSR 68-10c: Sections 205(g), 216(h)(2)(A), and
216(h)(3)(C).—Effect of State Ex Parte Determination on Findings of
Secretary

SSR 68-10c

CRUZ v. GARDNER, 375 F. 2d 453 (7th Cir., 3-30-67)

Where a worker, the father of illegitimate children, publicly
acknowledged them as his children and lived with them continuously in
Indiana until his death in 1958, but took no action in a court to legally
recognize them for inheritance purposes as required by Indiana law, and
where the plaintiff, after filing an application on behalf of the children
for child's insurance benefits, filed a petition in 1964 in an Indiana
court for a determination of heirship, and the court entered an ex
parte order declaring that the children were the worker's sole and
only heirs, held, (1) since the children would not have the same
status under Indiana law as a child relative to taking intestate personal
property, they are not the worker's children for social security purposes
under section 216(h)(2)(A) of the Act, and therefore they are not entitled
to child's insurance benefits under the Act as in effect prior to the
Social Security Amendments of 1965; and (2) in determining whether a
claimant has the status of "child" of a worker under section 216(h)(2)(A)
of the Act, the Secretary is not bound by a State court ex parte
determination of heirship, but shall apply applicable State law governing
the devolution of intestate personal property.

(In February 1966, the plaintiff filed a new application on behalf of the
children, and the Secretary determined that the children, having met the
requirements of section 216(h)(3)(C)(ii) of the Act as amended in 1965,
have the status of "child" of the worker and are entitled to benefits
retroactively to September 1965.)

HASTINGS, Chief Judge. Apolonia Cruz commenced this action in the
United States Court for the Eastern District of Wisconsin, on behalf of
five illegitimate children of the wage earner Silverio Baez, against the
Secretary of Health, Education and Welfare pursuant to Section 205(g) of
the Social Security Act, 42 U.S.C.A. §405(g). She sought thereby to obtain
judicial review of a final decision of the Secretary denying plaintiff's
application for child's insurance benefits under Section 202(d) of the
Act, 42 U.S.C.A. §402(d).

The Secretary had denied the application upon finding that the
illegitimate children failed to meet the statutory eligibility
requirements.

The wage earner was legally married in Puerto Rico to Epifania Diaz in
1947. One child, Hidalisa, was born of this marriage in 1948 and is
living.

The marriage was never dissolved. The existence of this undissolved
marriage and the child born of it were known to plaintiff, as well as the
wage earner, at all times material to this controversy.

Plaintiff and the wage earner came separately to Indiana from Puerto Rico
in 1953. Shortly thereafter, they began living together and continued such
relationship until his death on December 4, 1958. They had five children,
the claimants on whose behalf plaintiff commenced this action. Four of the
children were born between 1953 and 1958, and the fifth some four months
after the wage earner's death.

The wage earner acknowledged publicly that the first four of such
children were his children. There is no dispute that plaintiff and wage
earner were the parents of all five children.

It is conceded that plaintiff and wage earner were never married and that
he never took action in a court to recognize legally any of the
children as his own.

In 1958, upon the death of the wage earner, plaintiff applied for
survivor's insurance benefits on behalf of herself and the four children
then born. Benefits were denied by the Bureau of Old Age and Survivors
Insurance because of claimants' inability to satisfy the necessary legal
requirements. No appeal was taken.

In 1959, the wage earner's lawful wife Epifania and the legitimate child
of their marriage, Hidalisa, successfully applied for and began receiving
survivor's insurance benefits.

In 1962, plaintiff unsuccessfully filed a second application on behalf of
the five illegitimate children, the one now before us under review.

In 1964, prior to an administrative hearing on the second application, a
petition was filed in the Superior Court of Lake County, Indiana for
determination of heirship in the absence of general administration. Ten
days before the administrative hearing, the Superior Court of Lake County,
Indiana issued an ex parte order reciting that Silverio Baez (wage earner)
had died intestate and left as "his sole and only heirs" the five children
on whose behalf plaintiff commenced this present action.

The petition to determine heirship filed by plaintiff on behalf of the
five children and the ex parte order entered were plainly incorrect
since the wage earner was survived by a widow and one legitimate child in
Puerto Rico.

The district court and the Secretary both held that the test to determine
the eligibility of the five illegitimate children to benefits was whether
each of the children was a "child" within the meaning of Section
216(h)(2)(A) of the Act, 42 U.S.C.A. §416(h)(2)(A), which reads:

"(2)(A) In determining whether an applicant is the child or parent of a
fully or currently insured individual for purposes of this subchapter, the
Secretary shall apply such laws as would be applied in determining the
devolution of intestate personal property * * * if such insured individual
is dead, by the courts of the State in which he was domiciled at the time
of his death * * *. Applicants who according to such law would have the
same status relative to taking intestate personal property as a child or
parent shall be deemed such."

Since the wage earner was found to be domiciled in Indiana at the time of
his death, the law of Indiana is applicable to determine "the devolution
of intestate personal property" and whether the illegitimate children
would have the "same status relative to taking intestate personal property
as a child."

The applicable Indiana law is Section 6-207(b), Burns' Indiana Statutes,
which reads:

"For the purpose of inheritance to, through and from an illegitimate
child, such child shall be treated the same as if he were the legitimate
child of his father, if but only if (1) the paternity of such child has
been established by law, during the father's lifetime; or (2) if the
putative father marries the mother of the child and acknowledges the child
to be his own."

It is clear that neither of the two foregoing statutory prerequisites
were met. The paternity of the children was not "established law"
[1] during the wage earner's
lifetime and, obviously, he did not marry the plaintiff.

The district court was in agreement generally with the foregoing meaning
of Section 6-207(b). However, it held that the Secretary erred in limiting
his own statutory test to the right of intestate succession under the
state law. It concluded that the proper legal standard to determine if a
person was a "child" was whether under any Indiana law the person
would be entitled to a child's share of the deceased's intestate personal
estate.

The district court found applicable the provisions of the Indiana
Bastardy Act, Sections 3-624, 3-629, Burns' Indiana Statutes. We find this
reliance is misplaced. This Act imposes an obligation upon a father to
support his illegitimate child in his lifetime; his estate may be held
liable for such support after his death. It has nothing to do with
inheritance rights nor with the devolution of intestate personal property.
In short, we find it wholly irrelevant to the standards imposed by Section
216(h)(2)(A), supra.

The district court found persuasive and binding on the Secretary the
ex parte determination of heirship of the Superior Court of Lake
County, Indiana. It held the Secretary could not summarily disregard this
determination and try the issue de novo. We conclude the trial court erred
in reaching this conclusion.

The estate court procedure used in the Superior Court of Lake County,
Indiana is set out in Section 6-606, Burns' Indiana Statutes, as
follows:

"(d) The decree of the court [determining heirship] * * * shall be
conclusive of the facts determined therein on any interested person who
has been notified personally or by mail in accordance with the
provisions of this code, subject to the right of appeal." (Italics
added).

Subsection (a) provides as follows:

"* * *. Upon filing of the petition the court shall fix the time of
hearing thereof, notice of which shall be given to all persons known or
believed to have any interest in the estate or any part thereof as heir
or through an heir of the decedent. In addition, notice by publication
shall be given to all unknown heirs of the decedent." (Italics added).

Obviously, the Secretary does not fall within the purview of this
statute. He is not a person who has any interest in the wage earner's
estate "as heir or through an heir of decedent." He did not receive any
notice of such proceeding, and need not have received notice. He was not a
party to the proceeding and could not have been bound by any determination
made therein.

This view is buttressed by the holdings in two recent federal district
court cases construing the law of Indiana.

Further, in Alger and Schultz the courts held
that the Indiana law as set out in Burns' §6-207, supra, is controlling in
determining the rights of illegitimate children as to intestate property
and is the proper criterion for determining whether a claimant is a
"child" entitled to insurance benefits under the Social Security Act. In
Schultz, the district court found that the Indiana Bastardy
Act was not relevant to a determination of this issue.

These two federal cases, decided by Indiana district judges applying
Indiana law appear to us to be quite conclusive and lend full support to
the Secretary's position in the instant case. We concur in those
decisions.

In fairness to the district court in the instant case, it should be
pointed out that these two applicable decisions were not officially
reported, were not cited by the parties and obviously were not brought to
the attention of the district court. They should have been. To us, at
least they are directly in point and quite conclusive.

Finally, although we note, as have other federal courts, that while cases
such as the one before us often lead to harsh results, relief must be
sought from the hands of Congress. Indeed, our attention has been called
to an amendment of the requirements of Section 216(h) of the Act
pertaining to a child's status.

Section 330 of Public Law 89-97, July 30, 1965, §216(h)(3)(C)(ii) of the
Social Security Act, 42 U.S.C.A. §416(h)(3)(C)(ii) (Supp. I, 1965), now
provides to make eligible for benefits children of an insured wage earner
who could not meet the previously established requirements.

Under the amendment an insured father's child would be considered a
"child" within the meaning of the act if an insured father "is shown by
evidence satisfactory to the Secretary to have been the father of the
applicant, and such insured individual was living with or contributing to
the support of the applicant at the time such insured individual died."

In response to an inquiry from the bench at oral argument in this case,
we have now been advised that on February 3, 1966, a new application for
Social Security benefits was filed by plaintiff-appellee Cruz on behalf of
her five illegitimate children. On May 12, 1966, the five children were
administratively found to be eligible for benefits under the 1965
amendments and have been and now are receiving such benefits, retroactive
to September, 1965.

Further, the only benefits remaining at issue under the unamended
provisions of the Act are those from the date of the plaintiff's original
application, February 7, 1962, to September, 1965. The 1965 amendments
afford no relief for such part of the claim. Since the children currently
are receiving benefits under the amended Act, no remandment to the
Secretary is required.

For the foregoing reasons, the decision and judgment of the district
court is reversed.

[1] It is well settled in
Indiana that "established by law" means established in a court of law.
Thacker v. Butler, 134 Ind. App. 376 (1962).

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